Many Australian businesses are turning to online bookkeeping services to manage their bookkeeping needs, but what is it that a small business owner should look for in a bookkeeping service, and is this the right choice for your business? Let’s look at some of the benefits and challenges associated with using an online bookkeeper to help manage your accounts.
What is online bookkeeping?
Online bookkeeping, also known as ‘virtual bookkeeping’ or ‘cloud bookkeeping‘, is the process by which the day-to-day financial tasks of a business are managed remotely, through the use of internet-based (or ‘cloud’) accounting software such as Xero, Quickbooks Online and MYOB. The main difference between traditional bookkeeping and online bookkeeping is that with the increased availability of cloud-based accounting software, your bookkeeper can login remotely and service your business requirements from any location, at any time, bringing a new level of flexibility and efficiency to the process.
With many industries facing unprecedented skills and staff shortages, now more than ever, business owners are looking for ways to better manage their time and streamline processes to maximise efficiency within their businesses. Having an online bookkeeper service your business means that there’s one less staff member onsite, workflow interruptions and distractions are reduced, and if using an outsourced bookkeeping firm such as Darcy Bookkeeping and Business Services, there is a team behind your bookkeeper that can step in if your usual bookkeeper is away on holidays or falls ill.
Darcy Bookkeeping has been providing online accounting and bookkeeping services to Australian businesses for more than 10 years. Our team are experts in the popular cloud accounting software programs so we can work remotely. However, we can also work from your office if you prefer. Give us a call on 1300 728 875 or send us a message to discuss your needs.
What online bookkeeping services are available?
Some of the tasks most commonly carried out by an online bookkeeper include routine bookkeeping tasks, such as:
- Data entry
- Reconciliation of bank accounts and credit cards
- Preparation and lodgement of Business Activity Statements (BAS)
- Preparation and lodgement of Income Activity Statements (IAS)
- Payroll and Superannuation processing
- Preparation of Management Reports.
For owners of small businesses who do not yet have bookkeeping or accounting systems in place, an online bookkeeper can provide guidance on choosing the best accounting software for your business, look after the setup of the software to suit your needs, and provide training on how to use the software. In addition, they can catch up on any bookkeeping that needs to be done in order to bring you up to date, including liaising with the Australian Taxation Office on your behalf.
For businesses that are established and looking for ways to improve their current processes – and perhaps save money – an online bookkeeper can provide an audit of your accounts and make suggestions as to how you could streamline your accounting processes. This could be through software integrations and/or more efficient processing strategies.
Other services that might be offered by online bookkeepers include:
- Cash flow management
- End of financial year preparation and reporting
- Accounts Payable and Accounts Receivable management, such as invoicing and following up overdue accounts on your behalf.
Some bookkeeping firms also have the capacity to offer online accounting services (also known as a virtual CFO service), which many companies use to obtain higher-level guidance on the financial health of their business and future plans.
How are your financial records and data kept safe online?
Most online accounting software systems are more secure than their offline counterparts, with continual and real-time updates being standard. Access is password protected, often with the added security of two-factor authentication (2FA). Because of this, you can rest assured that you have control over who has access to your business’s financial records. An additional security feature of most software packages is the ability to see who has accessed your file and when.
When engaging an online bookkeeper, it is vitally important to check that they are registered with the Australian Tax Practitioner’s Board and that they have the appropriate Professional Indemnity Insurances. Ensure that they are experienced in your industry and are familiar with the accounting software that you have in place.
An added level of protection and security is found in having an engagement document or service delivery agreement signed by both you and your online bookkeeper. This agreement should outline the pricing and inclusions of the service being provided by the bookkeeper, as well as the confidential handling of your company’s financial data.
What are the benefits of online bookkeeping?
One of the most valuable benefits of online bookkeeping is the flexibility of service delivery. Gone are the days of having to be onsite to answer questions from your bookkeeper or needing to have someone available to let them into the office. The company’s financials can be accessed via the web, securely and at any time, so the work can be completed conveniently and efficiently. The need for in-person meetings is greatly reduced, perhaps even eliminated altogether, saving time and money.
As mentioned previously, online accounting software provides greater security than offline versions. You won’t need to risk emailing or couriering sensitive financial data as your bookkeeper and accountant can be granted direct access. This means your company’s financial information is less likely to fall into the wrong hands.
When your bookkeeper and accountant have access to your online financial data, they’ll be looking at real-time data that is constantly up to date. This reduces the risk that somebody will be looking at an outdated version and potentially making costly mistakes that will need to be fixed. Most online accounting software also has the capability to store digital copies of bills and receipts, so evidence is readily available at tax time or in the event of an audit.
Space and cost savings
By using an online bookkeeper, you also save space in your premises as you don’t need to provide a desk or computer for them to work from. You also don’t need to store large amounts of paperwork and filing cabinets as most documents can be scanned and stored electronically. This not only saves physical space, it also reduces overhead costs, putting more of your profits back into your hands.
Most cloud-accounting software programs are SaaS (software as a service) products, meaning you pay for a subscription rather than purchasing the program outright. Many of these subscriptions have monthly and yearly options, allowing you to pay in smaller increments rather than outlaying a large sum once a year. This is a great benefit for managing cash flow. And as the products are continually updated as part of your ongoing subscription, you don’t need to fork out for a new version every few years to stay up to date. In addition, being web-based means that the accounting software doesn’t require specific computer hardware, further reducing costs.
When using an outsourced bookkeeping firm to provide an online bookkeeper for your business, there is the reassurance of continuation of service. Even if your regular bookkeeper falls ill or goes away on holidays the bookkeeping firm will ensure that the books are still maintained. When looking for an online bookkeeping service provider, it’s also important to choose a bookkeeper who is experienced and aware of the nuances of your particular industry. Utilising an online bookkeeping firm gives you the opportunity to have someone who is highly skilled in your industry, and who is an expert in managing accounts, providing you with confidence that your company’s financials are being well looked after.
What are the disadvantages of online bookkeeping?
Arguably the biggest advantage of online bookkeeping can also, for some businesses, be the greatest disadvantage, i.e. not having face-to-face contact with your bookkeeper. Some business owners like to have the assurance of face-to-face contact with those they do business with. Some people feel more connected to their service providers when they have regular contact and like the opportunity to talk through their finances and their business management.
There are some firms who offer both onsite and online service delivery, and many small business owners find that after a time of building trust and a strong working relationship with their bookkeeper, the switch to an online service delivery model is acceptable. Darcy Bookkeeping and Business Services have bookkeepers who can offer both onsite and online services, or even a combination of both.
For most Australian small businesses, using an online bookkeeping service is a great option for reducing costs while still reaping the benefits of having an expert bookkeeper doing the books. The flexibility and convenience of online bookkeeping can free up your time to do what you do best: running your business. This means your time is maximised and your business has a greater chance to be more profitable. The increased security of online bookkeeping and the potentially vast experience of an online bookkeeper provides peace of mind that your financial data is up to date and the accounts are compliant with Australian regulations.
Still not sure if online bookkeeping is the right choice for your business? We’re happy to have a chat about your concerns. As we offer both onsite and online bookkeeping services, our advice will be unbiased. Give us a call on 1300 728 875 or send us a message for an obligation-free consultation.